Accounts Receivable Aging
Definition of 'Accounts Receivable Aging'A periodic report that categorizes a company's accounts receivable according to the length of time an invoice has been outstanding. Accounts receivable aging is a critical management tool as well as an analytic tool that helps determine the financial health of a company's customers, and therefore the health of their business. |
|
Investopedia explains 'Accounts Receivable Aging'If an accounts receivable aging demonstrates that a company's receivables are being collected much slower than normal, this is a warning sign that business may be slowing down or that the company is taking greater credit risk in its sales practices.As a management tool, accounts receivable aging may indicate that certain customers are not good credit risks. It can therefore help a company make prudent decisions about whether or not to keep doing business with customers that are chronically late payers. |
Related Definitions
Articles Of Interest
-
Measuring Company Efficiency
Three useful indicators for measuring a retail company's efficiency are its inventory turnaround times, its receivables and its collection period. -
Understanding The Cash Conversion Cycle
Find out how a simple calculation can help you uncover the most efficient companies. -
Company Survival: Cash Conversion Cycle Is Key
Find out how to use this figure to analyze a firm's financial condition. -
Liquidity Measurement Ratios
Learn about the current ratio, quick ratio, cash ratio and cash conversion cycle. -
Mergers And Acquisitions: Understanding Takeovers
In the dramatic world of M&As, battleground terms meld with bizarre metaphors to form the language of the game. -
Interpreting A Company's IPO Prospectus Report
Learn to decipher the secret language of the IPO prospectus report - it can tell you a lot about a company's future. -
Strong Volume Gainers, Can It Continue?
Volume is one of those indicators that gets overlooked, likely because it's shown by default on almost every chart, making it a little dull. But volume is what drives markets. Big volume jumps ... -
After A Big Recovery Rally, It's Up To Renew Blue For Best Buy
Investors have bought Best Buy's story, but this quarter shows that a lot of work remains to be done -
Market Summary For May 17, 2013
The U.S. stock markets moved sharply higher this week, on track for its fourth straight week of gains, driven by ongoing improvements in economic indicators. -
If You Don't Mind Volatility, Deere Could Still Do Alright
Though Deere's shares sold off after earnings, the business model is sound and rolling along.
Free Annual Reports